San Antonio's newest children's hospital will be built on 18 acres of undeveloped green space west of Floyd Curl Drive and south of Hamilton Wolfe Road, according to a letter of intent signed by Vanguard Health Systems and the Children's Hospital of Philadelphia.

The planned free-standing facility with nearly 200 beds is scheduled to open in 2016, with construction beginning early next year. If the parties sign a final agreement, CHOP and the parent company of Baptist Health System will lease the property from the San Antonio Medical Foundation for 50 years once the hospital's construction is complete.

The effort will establish a pediatric program that can compete nationally, one providing specialized care to the sickest children in San Antonio and South Texas, Vanguard officials said. The for-profit hospital — to be financed, built and managed by Vanguard and CHOP — will serve children up to 19 years old, including the uninsured, those dependent on Medicaid and those with private health insurance.

The hospital also will serve as an academic teaching facility with University of Texas Health Science Center faculty providing care. The staffing model will be open to pediatric doctors in private practice as well.

Building a top-tier pediatric hospital “has been an ongoing conversation in San Antonio for 20 years,” said Trip Pilgrim, Vanguard's senior vice president and chief development officer.

But the talking is largely over.

Christus Santa Rosa is pushing ahead with plans to redevelop its downtown facility into a Tier 1 children's hospital — a decision the nonprofit hospital operator made after losing its bid to partner with UTHSC to develop a children's hospital.

The Vanguard-CHOP joint venture emerged as the top choice of UTHSC, which is in the Medical Center.

“We think this offers an opportunity to create an anchor location in the north part of the Medical Center proximate to the medical school, proximate to the research facilities, and that we believe is going to be a destination for very sick children,” Pilgrim said. “It will also be a big economic generator for the Medical Center.”

The Medical Center wants to use its land for education, clinical services and research, so the new hospital fits that mission well, Reed said.

The letter of intent includes an exclusivity provision prohibiting the operation of any children's hospital on land owned by the San Antonio Medical Foundation that is not under an existing lease.

This exclusivity does not preclude Methodist Healthcare or Christus Santa Rosa Health System from operating children's hospitals on land they already own in the Medical Center, Reed said. But it would prevent a third party from coming in to build another children's hospital in the Medical Center.

The exclusivity provision will be in effect during the initial term of a 25-year affiliation agreement that Vanguard and CHOP are about to enter with UTHSC.

The 18-acre site eyed by Vanguard and CHOP is on land purchased by the Medical Center in 1961 that was previously a dairy farm, Reed said. The tract is among 200 acres of undeveloped property owned by the Medical Center.

Bexar County Judge Nelson Wolff, a longtime proponent of building a Tier 1 children's hospital in San Antonio, called the site selection a positive step forward. But he also said he hopes progress will be more rapid than the timeline outlined in the letter of intent.

“I think they're doing it in the right spot. I think this is better than the first site they were looking at,” Wolff said, referring to a previously considered location near Floyd Curl and Wurzbach Road.

CHOP, ranked by Parents magazine as the top pediatric hospital in the nation, aims to “replicate” its success in San Antonio, hospital officials said.

CHOP CEO Steven Altschuler was not available for comment Wednesday. But building the new San Antonio children's hospital near a medical school “is critical to success, and we could not be more pleased with the site selection,” he said in a prepared statement.

The exact dimensions of the site still must be determined. The letter of intent also awaits final approval by the entities' governing boards.